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The Law and Theory of Trade Secrecy

The Law and Theory of Trade Secrecy

A Handbook of Contemporary Research

Research Handbooks in Intellectual Property series

Edited by Rochelle C. Dreyfuss and Katherine J. Strandburg

This timely Handbook marks a major shift in innovation studies, moving the focus of attention from the standard intellectual property regimes of copyright, patent, and trademark, to an exploration of trade secrecy and the laws governing know-how, tacit knowledge, and confidential relationships.

Chapter 10: Open Secrets

Michael J. Madison

Subjects: law - academic, intellectual property law


Michael J. Madison* I. INTRODUCTION Both inside and outside the thing that the law calls a ‘trade secret’ lie domains of open information exchange. Trade secrecy demands a corresponding openness precisely by virtue of the law’s requirement that the information may be protected as a trade secret provided that its secret status supplies its owner with economic value or a commercial advantage.1 That advantage necessarily comes via exchange with others. Perhaps the most famous and commercially successful trade secret in history, CocaCola’s formula for its classic soft drink, is the foundation of millions of dollars in sales to consumers worldwide. The commercial software industry likewise distributes products containing its trade secrets to millions of end-users annually. This Janus-like or two-faced character of trade secrets has long been an implicit feature of accounts of the law of trade secrets. The open character of trade secrets appears in accounts that analyse the doctrine in relational terms, when those accounts note that trade secrecy’s scope is usually limited to certain commercial or technical contexts. Information may be secret for purposes of interactions that are subject to special duties, such as those between employers and employees, and between business partners, but that same information may be accessible for other purposes, such as relations between a supplier and consumers, and between competitors. The latter groups ordinarily are entitled to access the secret, at least so long as they use ‘legitimate’ means. Openness also appears in accounts that focus on the thing-like character of the trade...

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